While purchase mortgage activity slumped in June,
Consumers who had
"Many homeowners with higher rates — particularly those who closed on their mortgage in the last 12 to 18 months — jumped at the opportunity to refinance, even for a small reduction in monthly payments," said Brennan O'Connell, director of data solutions at Optimal Blue, in a press release. "This behavior speaks to the ongoing
Rates for the 30-year fixed loan fell 6.86% on June 27 from 7.03% on May 30, according to the Freddie Mac Primary Mortgage Market Survey. It rose to 6.95% for July 3.
Optimal Blue's rate tracker from its product and pricing engine reached its low for the month on June 13 at 6.810% before ending the month at 6.938%. This was 8 basis points lower than the close of May.
The spike in rate and term refinances didn't change the fact that this area remains moribund for mortgage lenders.
Cash-out refi volume was up 11% but purchase volume was down 1%. This data was adjusted for fewer market days in June than in May.
Average loan amount declined by $300 to $374,200.
On an unadjusted basis, mortgage rate lock volume was down 12% in June
The primary source of the decline in the unadjusted data was a 14.9% drop in purchase lock activity compared with May, according to Optimal Blue's Market Volume Index. The annual decline was 14%.
Rate-and-term locks were up 19.8% month-to-month and 81.2% versus June 2023.
The cash-out product had 4.5% fewer locks compared with May, although this activity was flat with the same month last year.
For all forms of refis, market share rose to 16%, up from 13% the prior month.
Another source for rate lock data, Mortgage Capital Trading,
Conforming mortgage volume fell 130 basis points in June, compared with May to 55.9% from 57.2%, Optimal Blue said. The nonconforming share increased slightly to 13.5% from 13%, while Federal Housing Administration activity was unchanged at 18.4%. The Veterans Affairs share was up to 11.7% from 10.8%, while the U.S. Department of Agriculture program activity slipped to 0.5% from 0.6%.
Home purchase activity will determine how successful the rest of this year will be for mortgage originators.
"As we look toward the back half of 2024 and the
